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Revenues of $513 million, an increase of 9 percent from the second quarter 2015;

Gross margin of 33.1 percent, an increase of 790 basis points;

GAAP diluted earnings per share of 52 cents, compared with a loss of 37 cents per diluted share in the second quarter 2015; and

Non-GAAP diluted earnings per share of 65 cents, compared with a loss of 39 cents per diluted share in the 2015 period.

"We are pleased with our second quarter results, which reflect continued success with our smart meters in North America and EMEA and further progress on our cost saving initiatives," said Philip Mezey, Itron's president and chief executive officer. "In the second quarter we delivered significantly improved financial performance as compared to the prior year, including revenue growth of more than 10 percent, excluding foreign currency impacts. Following a great start to 2016, we have updated our full year guidance to reflect Itron's strong business momentum and prospects for continued success in the second half of 2016."

Mezey added, "As we continue to realize benefits from our 2014 restructuring initiatives, we remain focused on our ongoing efforts to drive operational improvements as well as product development and supply chain efficiencies across our business. Accordingly, we announced new restructuring projects to further reduce expenses through streamlining our global operations. We expect to achieve additional annualized cost savings of approximately $40 million by the end of 2018 from these projects."

Summary of First Quarter Consolidated Financial Results
(All comparisons made are against the prior year period unless otherwise noted)

Revenue
Total revenue for the quarter grew 9 percent to $513 million compared with $471 million in 2015. Changes in foreign currency exchange rates unfavorably impacted revenue by approximately $7 million for the quarter. Excluding the impact of foreign currency, revenues increased $49 million, or 10 percent, driven by growth in all segments, particularly in the Electricity and Gas segments. Total advanced and smart meter volumes increased 25 percent primarily due to smart metering projects in North America and Europe. Electricity revenues grew 14 percent with growth in all regions and Gas revenues grew 8 percent driven by smart meters in Europe and a record level of North American revenue. Revenues in the Water segment grew 2 percent compared with the prior year.

Gross Margin
Gross margin for the quarter increased to 33.1 percent compared with the prior year period margin of 25.2 percent, with increases in all segments. The improvement was driven by lower warranty expense, favorable product mix and operational efficiencies. In the prior year period, the company recorded a warranty expense of $23.6 million in the Water segment, which negatively impacted gross margin by approximately 500 basis points in that quarter.

Operating Expenses
Operating expenses for the quarter were $134 million compared with $123 million in 2015. The increase was primarily driven by higher general and administrative ("G&A") costs related to professional fees associated with the company's review of software related revenue recognition and revision of previously issued financial statements in the 2015 Annual Report on Form 10-K. In addition, GAAP G&A costs were $4.6 million lower in the prior year period as a result of an expense recovery from a litigation matter associated with a prior acquisition.

Non-GAAP operating expenses were $128 million, an increase of $5 million compared with 2015, due to the higher G&A costs for professional fees associated with the review of software related revenue recognition and revision of previously issued financial statements.

GAAP Operating Income, Net Income, Earnings per Share
GAAP operating income improved to $35 million for the quarter compared with an operating loss of $4 million in 2015. Net income for the quarter was $20 million, or 52 cents per diluted share, compared with a net loss of $14 million, or 37 cents per diluted share. The increases in operating income and net income for the quarter reflected the strong performance in revenue and gross margin.

Cash Flow
Net cash provided by operating activities was $17 million in the second quarter of 2016 compared with $22 million in 2015. Free cash flow was $6 million for the second quarter compared with $10 million in the prior year quarter. The decrease in free cash flow was primarily due to increased tax payments, prepayments on software programs and working capital requirements.

Other Measures
Total backlog was $1.3 billion and twelve-month backlog was $688 million at the end of the quarter. Bookings in the quarter totaled $349 million, reflecting a number of diverse bookings in all segments across many customers.

Update on Forms 10-Q Filings and Second Quarter 2016 Earnings Conference Call
On Aug. 4, 2016 Itron filed a Form 12b-25, Notification of Late Filing, with the SEC related to the company's Form 10-Q for the second quarter. The company expects to file its Forms 10-Q for the first and second quarters and host a conference call to discuss financial results, financial guidance for the full year and provide an operational update no later than Sept. 12, 2016.

Financial Guidance Update — Full Year 2016
Itron's guidance for the full year 2016 is as follows:

Revenue between $1.95 and $2.0 billion

Non-GAAP diluted EPS between $2.20 and $2.45

This guidance assumes current currency exchange rates for the remaining portion of the year, average shares outstanding of approximately 38 million for the year and a non-GAAP effective tax rate for the year of approximately 37 percent.

With respect to the company's expectations for the full year, the company has not reconciled non-GAAP diluted earnings per share to GAAP diluted earnings per share due to the inherent difficulty in forecasting restructuring charges, which is a reconciling item between the non-GAAP and GAAP measure. Due to the uncertain effect, timing and potential significance of such charges that will impact GAAP net earnings, the company is not able to provide such guidance.

Operational Update
The company filed a Form 8-K today announcing projects to restructure its operations. These projects will improve operational efficiency, reduce expenses and improve our competitiveness. The company expects to close or consolidate several facilities and reduce its global workforce as a result of the restructuring. Certain projects will begin immediately and we target to substantially complete the activities by the end of 2018. We forecast annualized savings of approximately $40 million upon completion of these projects. We expect to incur pre-tax restructuring charges of approximately $55 to $65 million related to these projects. As many of our employees are represented by unions or works councils, any specific employment actions related to the projects may be subject to legal requirements, including prior consultation on the projects with work councils and authorities in some of the countries in which Itron operates. This may affect the timing of the charges and planned savings in certain jurisdictions. See the Form 8-K for further details on the restructuring.

Update on Second Quarter 2016 Form 10-Q Filing
The company expects to file its Form 10-Q for the second quarter no later than Sept. 12, 2016, remediating its delinquency in its Quarterly Reports.

Earnings Conference Call
Itron will host a conference call to discuss the financial results and guidance contained in this release at 4:30 p.m. Eastern Time on Sept. 1, 2016. The call will be webcast in a listen-only mode. Webcast information and conference call materials will be made available 10 minutes before the start of the call and will be accessible on Itron's website at http://investors.itron.com/events.cfm. A replay of the audio webcast will be made available at http://investors.itron.com/events.cfm. A telephone replay of the conference call will be available through Sept. 6, 2016. To access the telephone replay, dial (888) 203-1112 (Domestic) or (719) 457-0820 (International) and enter passcode 833920.

Forward Looking Statements
This release contains forward-looking statements within in the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our expectations about revenues, operations, financial performance, earnings, earnings per share, cash flows and restructuring activities including headcount reductions and other cost savings initiatives. Although we believe the estimates and assumptions upon which these forward-looking statements are based are reasonable, any of these estimates or assumptions could prove to be inaccurate and the forward-looking statements based on these estimates and assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Some of the factors that we believe could affect our results include our ability to execute on our restructuring plan, our ability to achieve estimated cost savings, the rate and timing of customer demand for our products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, adverse impacts of litigation, changes in laws and regulations, our dependence on new product development and intellectual property, future acquisitions, changes in estimates for stock-based and bonus compensation, increasing volatility in foreign exchange rates, international business risks and other factors that are more fully described in our Annual Report on Form 10-K for the year ended December 31, 2015 and other reports on file with the Securities and Exchange Commission. Itron undertakes no obligation to update or revise any information in this press release.

Non-GAAP Financial Information
To supplement our consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, constant currency and free cash flow. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. The company believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. Our non-GAAP financial measures may be different from those reported by other companies. A more detailed discussion of why we use non-GAAP financial measures, the limitations of using such measures, and reconciliations between non-GAAP and the nearest GAAP financial measures are included in this press release.

About Itron
Itron is a world-leading technology and services company dedicated to the resourceful use of energy and water. We provide comprehensive solutions that measure, manage and analyze energy and water. Our broad product portfolio includes electricity, gas, water and thermal energy measurement devices and control technology; communications systems; software; as well as managed and consulting services. With thousands of employees supporting nearly 8,000 customers in more than 100 countries, Itron applies knowledge and technology to better manage energy and water resources. Together, we can create a more resourceful world. Join us: www.itron.com.